Pennsylvania Life and Health Insurance Exam Practice Question
Which of the following policies has a guaranteed interest rate with the possibility to earn an interest rate higher than the guaranteed rate?
Correct Answer: D
Rationale: Universal life insurance policies feature a guaranteed interest rate on the cash value component, while also allowing for the potential to earn a higher interest rate based on market performance or insurer performance.
Option A, credit life, typically provides a fixed benefit amount without a cash value component, thus lacking any interest rate features.
Option B, renewable term, offers coverage for a specified term but does not accumulate cash value or interest.
Option C, term insurance, is similar to renewable term in that it provides pure life coverage without cash value or interest earning potential.
Unlock All Questions
Subscribe to Premium for full access to all practice questions, detailed rationales, and performance tracking.
Subscribe Now